California Professional Forums - SB 899 doesn't affect just the IWs...

HOME PAGE

GO to Injured Worker Forum

Navigation:

login

ALL FORUM'S TOPICS OR WAR STORIES TOPICS

Thread Title: SB 899 doesn't affect just the IWs...
Created On Thursday January 18, 2007 9:38 AM

claim_monkey
Member

Posts: 36
Joined: Aug 2006

Thursday January 18, 2007 9:38 AM

User is offline

View thread in raw text format

Okay, editorial time...

Anyone who has been in this industry knows what happens when reforms happen for the benefit of the employer market. Workers' comp used to be a prime target for abuse by injured workers, attorneys, and medical providers. A lot of people, at first glance, classify this as fraud on the basis that some person they know of or some story they heard indicates that somebody got a big award for not really being hurt that much. Nowadays, it's really tough to get benefits and medical treatment authorized due to some of the provisions set forth by SB 899. Where is the balance? The pendulum has swung directly into the hands of employers and insurance carriers who are out to make the biggest profit possible with the least amount of expense. Unscrupulous UR companies are popping up out of the woodwork and making oodles of money doing it. And this leads me to my next point. The insurance companies are also shafting their own employees.

SB 899 may have some good points to it, but from what I've seen, it is thoroughly abused by employers and insurers by and large. The margin of profit on insurance premiums has dropped. The amount of premium money collected has dropped. Any correlation? It doesn't take a genius to figure that one out.

1. When insurance companies were collecting higher levels of premium, they were also able to maintain adequate staffing throughout their companies to properly service the files. Examiners set reserves, dealt with medical authorization issues, negotiated settlements, and did the heavy analytical work on their files. They had assistants handling their indemnity payments, letters, filing, bill payments, and even medical only claims. With the loss of profit margin generated by SB 899 (lower PD ratings also mean lower premium rates), examiners are being expected to handle large caseloads and do essentially all of their own paperwork with a bare minimum of assistance. The insurance companies are fast becoming bare-bones operations. This also makes startup costs a lot lower and if you so desire it, you too could start your own insurance company in your garage.

2. Higher restrictions on medical treatment. Yes. Let's all take the HMO approach to treating occupational injuries. If I'm paying someone the max TD rate, I really want to sit around and wait for UR to approve an MRI. Let's see here. OMFS for MRI study = ~$690. UR taking 5 days to approve it while TTD owed = $600 plus UR costs (usually ~$300). Okay. That's $900 that could have been better spent on actually confirming or ruling out a diagnosis. Another scenario: examiner receives request for surgical intervention on an open, accepted case with very *CLEAR* pathology indicated the need for an arthoscopic surgery to repair an ACL in IW's knee. Sent case to UR ($300). UR delays for 14 days and then denies surgery due to "lack of medical documentation" or some other spurious reason. PTP rebuts with a thorough med-legal eval ($500-$750 for report). UR reviews again and denies (additional $300) because it's too early for surgical intervention citing something from ACOEM. EE becomes represented and A/A files for Expedited. Judge overturns UR denial for whatever reason. Fees awarded to A/A of $500, defense counsel paid $750 for appearance and $600 for initial file analysis and recommendations. Surgery to be performed. Hmm, that's about $3,200 that could have been saved. But it's okay, the PD rating ends up at 12%, or $8,415 instead of 34%, or $34,980.

3. Now that tighter margins are being run, who ends up suffering? Well, that would be all of us "little people." The examiners, the injured workers and their families. The examiners get burdened with extra work and red tape to cut through, as does the injured worker. The injured worker loses too, because the surgery is less successful being performed 6 months later with their condition worsening. Yet, the insurance company "saves" money and passes it onto the employer, who probably is underreporting their payroll, keeping a second set of books, misclassifying their employees, etc. Oh yeah, due to the difficulty of successfully pursuing a 132a claim, the injured worker loses their job because they were out on disability for six months and villified as some sort of parasite by their employer, thus allowing them to step away from a discrimination suit due to "business necessity."

4. Lastly, does no one actually remember that whole open rating fiasco??? I mean, seriously, insurance companies were outselling each other promising the world to employers (yeah, I know this other carrier is running off the WCIRB's pure premium rate, but here, we won't charge you an experience modification) just to make a quick buck and then leaving the injured workers and their own employees in the lurch when they became insolvent!!

Okay. I'm stepping off the soap box now. I'm just a bit annoyed these days with anyone who actually thinks everything in SB 899 was a "good" idea. Some stuff is okay, but if we really wanted to make things fair and equitable, AMA impairments would have been implemented years ago rather than under duress in such a critical economic situation.

ymcgavin@socal.rr.com
Senior Member

Posts: 1351
Joined: Jun 2002

Thursday January 18, 2007 6:23 PM

User is offline

View thread in raw text format

Hi Claim_Monkey,

You stated: "The margin of profit on insurance premiums has dropped. The amount of premium money collected has dropped. Any correlation?"

Actually, IMHO, the margin of profit on insurance premiums has not droppd, but instead increased --- for the IC. Of this, there can be no doubt.

Yes, "the amount of premium money collected has dropped," but only marginally for us insured employers.

Due to ACOEM, the 24 visit cap, and UR, the IC is paying out much much less for treatment --- and if nowhere else, this is where the IC "margin of profit on insurance premiums" has dramatically increased.

Now, if only the IC community would truly pass along the savings to the insured employer, then and only then, would there be a solid basis for claiming the profit on premium has dropped.

The real winners (financially speaking) are the IC community and the PSI employer and legally uninsured community. The PSI employer (think Safeway) has seen windfall savings, as have the legally uninsured (think City, County, & State) community.

As an employer, have I seen a reduction in premium? Yes indeed. However, the decrease in my premium pales in comparison to the profits my comp carrier is making.

It appears as though SB 899 was a double-edged sword. Although touted as necessary to bring employers back to California, in fact, SB 899 is a job killer for the AA, DA, and claims adjuster/bill review community --- and it is not bringing employers back to California, unless one considers the IC as the employer. In turn, the IC is doing its best to maximize profit. Golly, even SCIF has decreased their DAs by 20% just last year.

Hence, your following statement makes perfect sense to a businessman: "The insurance companies are fast becoming bare-bones operations."

As was discussed previously on a different thread, don't be surprised to learn that outsourcing to India by the IC community is next.

York McGavin
ymcgavin@socal.rr.com

docwats
Member

Posts: 33
Joined: Feb 2005

Friday February 09, 2007 10:12 AM

User is offline

View thread in raw text format

As usual, York, I agree.

As an employer, I've seen a little relief from my IC for WC coverage, which I've never used. As a care provider, even with the supposed increase in E/M schedule, I can't get my cat seen at the Vet for what I am paid to see a person with a work injury. Nevada and Oregon pay double CA OMFS, the Feds almost triple.

Factor in the 10-15% an MPN takes for the privilege of working in California, I've found it necessary to cut my staff in half. Not that there's less to do. Referrals and communication, and re-re- billing of arbitrarily denied charges is pretty much what we do.

I end up making people P&S a lot more often, and sooner now. Less treatment is allowed and it's cheaper to rate them out. If I don't, they go to QME and are out. Once disabled, they probably won't work in CA again. I guess if they leave the state, it looks like we're getting more people back to work and having less TD. I wonder how long before we deplete the workforce. The damage to workers and families is mounting and will come back to bite us. They can't buy or rent houses; the housing market may be already falling, in part related to people out of work because of this system.

I agree, the only winners here are the WC carriers,the MPN shareholders & execs, and UR companies.

bw md

claim_monkey
Member

Posts: 36
Joined: Aug 2006

Wednesday April 04, 2007 9:58 AM

User is offline

View thread in raw text format

Looking back at my original post, I realize now why I posted it. The ICs, PSEs, legally uninsured, UR companies, MPN execs, etc. are seeing record profits. Yet everything they do is cut-rate BS. Every one of these MPNs is Mickey Moused together with defense doctors utilizing run down clinics in bad neighborhoods. I'm not going to name any clinics in particular, but there are some clinics in *APPALLING* shape, darn near anarchic neighborhoods, and the doctors see just as many patients as the former mills. They just have a different name now: Occ Med Clinics... Personally, I'm a bit burnt out on all of this stuff and would rather just see the system back the way it was. The PD awards these days are pathetic. IWs get caught in a ridiculous net of red tape, misinterpreted legislation, and generally poor standards of care. You know how employers can cut their risk? By being civilized human beings. Especially when it comes down to how they treat their employees. The litigation and "excessive" treatment that ran rampant prior to SB899, in my experience, has largely been the result of poor employer/employee relationships. I'm sure I'm oversimplifying, but the fact of the matter remains that many of the nightmare cases I've handled over the years have involved poor employment conditions/relationships.

docwatts:
You're right. Medical reimbursement is pathetic in California. I think Medicare might even pay more than OMFS allows for. The only way you'll be able to run a medical clinic here is to move your clinic to some rundown neighborhood that not even hardened criminals feel safe in at night. Then, hire a bunch of high school dropouts to run the office. Have a computer run your billing and see like 800 patients a day. Don't write prescriptions. Instead, dispense meds at the clinic. That way you get to charge more. Who cares if UR denies treatment? You had 799 other patients that day, plus you can discharge them or make them P&S. Who cares if you only get paid $12.67 for one patient? 800 x $12.67 = $10,136.00/day. 20 days a month and 12 months a year later, you're grossing more than $2.4 million. And if you think it's possible to see 800 patients a day, you're probably wrong, because the amount of time it takes a defense doctor to discharge you or deny treatment is only like 1.4 seconds... Seeing 3 patients every 5 minutes will keep you on track to that dream.

Pardon my cynicism, but this whole state is out of whack. As a former state employee and long time claims examiner, it's only a matter of time before all of these bandages completely fall off the hemorrhaging gun shot wounds otherwise known as our state economy.

Anyway, I'm just rambling now... Just throw a tomato or two at me to get off this soap box...

RBaird
Senior Member

Posts: 211
Joined: Mar 2004

Wednesday April 04, 2007 12:31 PM

User is offline

View thread in raw text format

I recall reading a self-congratulatory story about the author of SB 899, Sen. Poochogian, about the reform of what he terms a broken, job-killing and expensive system. The right to control of treatment was shifted to the self-insured ER and carriers because there was objective evidence of massive over-treatment, excessive billings, etc. All your observations are correct, but the remedy is no better than the status quo ante in terms of delay/denial of treatment and unsupported legislative policy (104 week limit, 24 chiro or P/T cap) and an genuine legal hash of apportionment and permanent disability determination. In a better world, the legislature and Arnold would set up a blue ribbon group along the lines of the little Hoover commission or the constitutional revision commission to do a ground up review of the statutes and regulations. It would take time, be expensive, and absolutely worth it. SB899 and in general the legislature's abdication of any significant fact finding by committee and low quality of draftsmanship will continue to benefit the self-insureds and carriers at the expense of the legitimate IW and treaters. Just my two cents; I am glad to be retired and out of this train wreck.
R. Baird, ex-WCALJ

ymcgavin@socal.rr.com
Senior Member

Posts: 1351
Joined: Jun 2002

Wednesday April 04, 2007 6:25 PM

User is offline

View thread in raw text format

Hi Judge Baird,

You stated: "SB899 and in general the legislature's abdication of any significant fact finding by committee and low quality of draftsmanship will continue to benefit the self-insureds and carriers at the expense of the legitimate IW and treaters."

I do agree with you that the PSI and the IC community are the ones who benefited from SB 899, and that the cost is being borne by the IW, as well as those treatment providers.

However, I'm not so sure about the poor drafting being due to "the legislature's abdication." Instead, as I remember it, the governator was holding the "voter initiative gun" to the legislator's heads. It was the threat of revamping the comp system, constitutionally, that scared the legislators into signing off on SB 899 --- and there was a mandated deadline, by the governator, for the legislators to sign off on SB 899.

At that place in space and time when the governator was holding that "voter initiative gun" to the legislator's heads, he was riding a tremendous groundswell of public support. I would posit that if the legislature did not sign off on SB 899, the governator would indeed have taken it to the people, and he would have prevailed.

Then, because the constitution had been amended, it would take, as I recall, a 2/3 vote from both houses to change the constitution back --- at some later date. At least the way it is now, once this governator is gone, all it will take would be a sympathetic governor and a simple majority to change the system back.

But, like you, I have retired from the comp system. It has now been 2 years, 4 months, and 4 days, since I chose to accept a new IW referral --- and even if it changes back sometime in the future, I will not be back.

Now that I have focused on building my practice around individual/group health insurance patients, as I did when I started my company, I am enjoying getting paid in 30 - 60 days, not 30 - 60 months. Also, in the individual/group health insurance arena, there is no discussion about the report of Dr. Washout, a Thomas C&R, or the report from a UR physician located in Texas. Last, in the individual/group health insurance arena, I have no need to maintain a staff of lawyers, paralegals, JDs, and hearing reps. It is quite simple: either the individual/group health insurance company pays me, or I go collect from my patient.

I hope to have my California comp AR cleared up by the end of this year, but in reality, probably not until 2008. The good news for us lien claimants, at least here in the southern region, is that we can now block set our lien conferences or lien MSCs --- something we were forbidden to do in the past by most PJs.

If the DA fails to show up at a lien MSC, we are being allowed to fill out the pre-trial conference statement, discovery is being closed, and the matter is forwarded to the PJ to set for trial per CCR 10562(b)(1-2).

My company, along with a number of other lien claimants, just did that yesterday in a case where there is well over $100k in outstanding liens. It will be interesting to see if a DA shows up for trial, for the IC failed to send anyone to the lien conference last month, and nobody appeared on behalf of defendant at the lien MSC yesterday, despite the IC being ordered to appear. The lien claimant, who served the IC with the order to appear as well as the notice of hearing, furnished the WCJ with a POS for both the lien conference and the lien MSC --- demonstrating that defendant had bee noticed.

York McGavin
ymcgavin@socal.rr.com

Puzzled
Member

Posts: 88
Joined: Apr 2005

Wednesday April 04, 2007 8:42 PM

User is offline

View thread in raw text format

Under those circumstances, what do you list as the trial issue(s)?

stewshe@comcast.net
Senior Member

Posts: 1381
Joined: Jun 2002

Thursday April 05, 2007 5:38 AM

User is offline

View thread in raw text format

Puzzled,

I suspect York will say, "penalties and interest!"

-------------------------
Stew (James T. Stewart) e-mail: stewshe@comcast.net
Author: Work Comp Index & Tables & Schedules in "The Labor Code Book," by LexisNexis/Matthew Bender.

7th ed. Work Comp Index (912 pgs), $119.00 ea; next ed. summer, 2010 {Discounts for orders of 12 or more}
Send check or money order & shipping info. (I cannot take credit cards.)

Prices INCLUDE sales tax, and shipping.

James T. Stewart; 1937 Santa Ana; Clovis, CA 93611

Adjusting4Workers
Junior Member

Posts: 9
Joined: Nov 2006

Sunday April 08, 2007 11:15 AM

User is offline

View thread in raw text format

I agree with Claim Monkey's #2 statement. It seems to me that the Utilization Review companies are the ones making the most buck out of this SB899 reform. As claim monkey provided per his/her scenario, that happens often in everday work when the claims adjuster is binded to utilize the UR companies per the internal policy of the IC even when there is no dispute, such as providing an MRI. I certainly believe a denial per lack of information is ridiculous. IC firms should only utilize UR when there is a dispute or something is in question. Furthermore, per the labor code an IC is only liable to utilize UR to delay, modify, or deny treatment. As a claims adjuster if I don't have a dispute in providing lets say a health spa to an injured worker, then that's between the injured worker and I, no other parties are affected. However, the DWC is pushing hard for IC firms to utilize UR for anything and everything, especially the fact that penalties are so high for UR mistakes, making ICs have to utilize the UR system.

claim_monkey
Member

Posts: 36
Joined: Aug 2006

Tuesday April 10, 2007 9:07 AM

User is offline

View thread in raw text format

<< I agree with Claim Monkey's #2 statement. It seems to me that the Utilization Review companies are the ones making the most buck out of this SB899 reform. As claim monkey provided per his/her scenario, that happens often in everday work when the claims adjuster is binded to utilize the UR companies per the internal policy of the IC even when there is no dispute, such as providing an MRI. I certainly believe a denial per lack of information is ridiculous. IC firms should only utilize UR when there is a dispute or something is in question. Furthermore, per the labor code an IC is only liable to utilize UR to delay, modify, or deny treatment. As a claims adjuster if I don't have a dispute in providing lets say a health spa to an injured worker, then that's between the injured worker and I, no other parties are affected. However, the DWC is pushing hard for IC firms to utilize UR for anything and everything, especially the fact that penalties are so high for UR mistakes, making ICs have to utilize the UR system. >>

Following up on that. I believe it is a mistake to push UR down the throats of ICs. As far as I have understood UR, the first level of review is the adjuster. If the adjuster has no problem with the treatment requested, then why submit it to UR? UR should remain the tool that it was meant to be not a standard. Otherwise, you pave the way for further litigation. Either way, I don't like UR. It's just about as fishy as letting an HMO decide my fate. Ergo the reason I opted for a PPO... I'd rather have a doctor evaluate me, treat me, and not be bound by some arbitrary guidelines. Workers' comp should not become an HMO.

FORUMS > WAR STORIES

FuseTalk 3.0 - Copyright © 1999-2002 e-Zone Media Inc. All rights reserved.

© 2013 WorkCompCentral Workers Compensation Forums